The World Bank says debt rose 5.5% in 2025, while the poorest eligible countries paid an average 8.2% on new private-creditor commitments, leaving less for long-term development in many cases.
Developing countries’ external debt reached a record $9.4 trillion in 2025, rising 5.5% at its fastest pace since 2021, the World Bank said in its annual International Debt Report. Much of the increase came from renewed private financing as bond markets reopened to many developing countries.
Developing countries paid $436 billion more in debt service than they received in new financing over 2022–2025, but long-term debt flows shifted from a $118 billion net outflow in 2024 to a $45 billion net inflow in 2025. A weaker US dollar accounted for more than a quarter of the $303 billion increase in public and publicly guaranteed debt by raising the dollar value of debt denominated in other currencies.
External debt is money owed by residents to lenders outside their country; borrowers can include governments, companies and individuals. The World Bank’s chief statistician, Haishan Fu, said access to international finance had improved but its price had not. Low- and middle-income countries were borrowing and paying more, in many cases leaving less for long-term development, she said.
Countries eligible for concessional financing from the World Bank Group’s International Development Association paid an average interest rate of 8.2% on new private-creditor commitments in 2025, the highest since 1989. Their external debt rose 8.1% to $1.3 trillion, a portion of the broader developing-country total.
Many governments issued new bonds to buy back debt coming due, the World Bank said. That spread repayments over time without significantly reducing the amount owed, often at higher interest rates.
In its November 5 coverage, The Guardian said the World Bank highlighted these rates on recent borrowing:
| Country | Interest rate |
|---|---|
| Laos | 11.5% |
| Republic of Congo | 13.88% |
| Kenya | 9.2% |
The report said heavy debt burdens may be closely associated with a decline in the affordability of a healthy diet during periods of global stress. It did not say the debt burden itself caused that decline.
Preliminary 2026 data suggested lending continued rapidly at high interest rates as global financing costs rose, the report said.
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